Human rights have often been at the forefront of business regulation; how much is enough. With the onslaught of a global economy, concerns over the rights, treatment, and working conditions of people in third world countries has become a major issue in reference to regulation. Emotions can run high when discussions of textile mill sweat shops arise. While many believe that the perceptions are over exaggerated, there seems to be little doubt that conditions in many countries are definitely not the same as in economically developed nations.
Some state that women, children, and even grown men being taken advantage of, mistreated, and even abused to inexpensively produce items to bring to market. Others insist that this is simply outsourcing labor to an economy that is in need of work and is operating within the legal, ethical, and moral boundaries of a particular culture. Similar situations surround the debates surrounding business and industry related to animals. Emotions of those protesting the use or alleged abuse of animals often exceed those seen from those who champion global human rights issues.
The fur and cosmetics industries have realized the affect of emotional opponents on their industry. There are many groups and individuals that are very emotionally outspoken while debating regulation and law dealing with animals. The fur industry has seen major impact because of the emotional aspects of using animals for furs. The use of animals for testing cosmetics has also come under fire from groups of extremely emotional animal rights groups. The attitudes toward regulation of the tobacco industry have taken a major turnover the last generation.
Use of tobacco products was, in the recent past, an accepted practice by most. Regulation and enforcement, in the past, was minimal as compared to present day. After many years of emotional outpouring, the anger and fear of those who perceive themselves as victims has taken its toll on this industry. Emotions can play a big part in arguments for and against business regulation. The emotions of a community and stakeholders can be long-term or short lived but emotions will often have a major impact on how a business must handle the situation. Case Study Ms.
Bates approached the EPA to help her with her case against Alumina. One of the EPA's main concerns is with water and verifying all water remains clean. Alumina is currently under the compliance of the Clean Water Act. Their independent site study also shows that the PAH level in Lake Dira's water is lower than the action level and it confirms Alumina's compliance under the regulation's guidelines. Under the Freedom of Information Act, Ms. Bates had legal right to approach the EPA to get the environmental audit report that documented Alumina's violation of the clean water act.
She and the public had the right to retrieve and view this information. Alumina released the report but withheld confidential business information. Under FOIA, a business can withhold commercial or financial information and records that are related solely to the internal personnel rules of the agency. Ms. Bates was ready to file a toxic torts action because five years ago the PAH level was above the prescribed limit. Alleging that Alumina's past violations are the cause of her 10 year-old daughters' leukemia. Normally, it is in company's best interest to settle the lawsuit outside of the court.
Fighting the case in court would cost more money and the likelihood that the company may lose credibility in the arena of public opinion. The court proceedings may also mean disclosing more confidential business information. Arbitration is the best method to settle the matter outside the court system. Arbitration is where both parties call upon an impartial third party arbitrator to settle the dispute. The one advantage of Arbitration is that the binding arbitration cannot be appealed. Under the arbitration agreement Alumina pays Bates' medical bills and agrees to setup a college fund for her daughter.
Discussion The decision to defend a position in the court system vs. the decision to settle is based not only on the facts of the case, but also on the impact of the society. In the case of Alumina vs. Ms. Bates, Alumina had a clear advantage in the facts but an unclear advantage or possibly a disadvantage in the eyes of the community. Though an independent study showed Alumina's PAH levels to be within the acceptable levels according to the EPA, the impact of an environmental scare in the community has potential to overshadow the findings of the study.
When making a decision to defend a company position or to settle, Alumina management must consider all the options. Ms. Bates, having undergone a great deal of stress in relation to her daughter's condition, is looking for two things, blame and help. Because the facts are in Alumnia's favor, legal counsel has advised that the company is in a good position to defend against the charges. While a day in court may prove to be cost- effective in the short run, the negative aspects of an environmental scare could hurt the company in the long run. A decision to settle shows compassion for Ms.
Bates' situation, dedication to the community, and a commitment to the environment. Whereas, if the company takes the case to court it shows a reluctance to handle this type of situation in a way that would be satisfactory to the community if such a scare had real merit. Finally, in the decision to settle or defend, one must consider potential for exposure of sensitive information. In a settlement case there is more control of the information that is shared. A decision to settle in the Alumina case is the right decision because it addresses the long-term operations of the company.
If Alumina shows its dedication and commitment through settlement then it has a good chance to maintain or increase the trust of the communities in which it operates. In the long-run the support of the community will prove to be a bigger payoff than the loss it will incur as a result of the settlement. One additional strategy to recommend to the key decision maker to solve the problem is to meet with the individual, who has brought forth a claim, and the local community, to inform residents that the problem mentioned in the paper and claim by the person is being dealt with by the company in a thorough and expeditious manner.
In essence, the company is not flexing its muscles and imposing on the community, but rather the company should mend fences and inform the community that its intentions are for the common good. But the decisions to disclose partial information under the FOIA, should be an option that the company take to show that the company has nothing to hide except if the information will compromise trade secrets. The company should conduct an independent study to evaluate and make an informed decision as to the extent, if any, of the claims against the company.
This in essence will show, as stated in the simulation, to federal and other governmental regulatory agencies that the company is making an effort to understand and find out if damage is done to the environment. Finally, the involvement of an independent arbitration proceeding has the effect of getting all the parties together in an amicable setting in order to come to a consensus for the problem at hand. This solution will avoid the costly expense and publicity to all parties involved.
This avenue can also be used to the benefit of the company to determine likelihood of other claims and settlement options. In essence, the oversight of the public and the law towards companies in various issues, such as the environment, will forever follow businesses to force them to comply with regulations. And those business must realize that decisions on issues that may harm the environment and the public should be thought-out thoroughly and with the involvement of management.